Over the years, you may have accumulated significant assets. Even if you only have modest holdings, you want to protect them as well as you can.
Trusts can provide you with asset protection. However, depending on your circumstances, you might also consider creating a family limited partnership.
Revocable trust
If your main concern is avoiding the probate process when you die, you may opt for a revocable trust. When you place assets that are not jointly owned in this kind of trust, you provide instructions as to their use and appoint a trustee who will manage the trust and carry out your wishes for passing the assets along to your heirs. As the name implies, you can change the terms or revoke the trust altogether any time you wish.
Irrevocable trust
An irrevocable trust, on the other hand, is often the choice of people with considerable wealth since there are some attractive tax advantages. However, you give up control in return for the protection of your assets, and once established, you cannot change or dismantle the trust.
Family limited partnership
With a family limited partnership or FLP, the individual partners do not own the assets as provided under the Revised Uniform Limited Partnership Act. The assets are safe from creditors, a group that includes anyone with a possible claim against a partner such as a soon-to-be-ex-spouse or unhappy business associate. To minimize exposure to possible litigation, people with considerable property may divide their assets into multiple FLPs. They may put the marital home into one FLP and the apartment building the family owns into another. Like various kinds of trusts, the FLP can accommodate your desire to protect the assets you have worked hard to accumulate and protect them for your family.